Insurance company

Whether the Controller of Insurance had pursuant to the proviso to section 40-C(1) of the Insurance Act, 1938 condoned the excess amount said to have been spent on the expenses of management by the respondent (insurance company) in the present case

Held, that once the respondent had admitted that the prescribed maximum limit of expenses had been exceeded it was incumbent upon it to show that the excess in the expenses of management had been condoned by the Controller of Insurance, and to what extent

However, documents in this regard which the respondent should have possessed were not produced, despite the noting of the stated discrepancy by the Tribunal

If, for whatever reason, the requisite documents were not produced before the Tribunal the same should have been produced before the High Court, but this too was also not done, nor were the same produced before the Supreme Court

Burden to establish that the Controller of Insurance had condoned the excess management expenses lay upon the respondent but the respondent had failed to produce any document to establish this fact

Appeals were allowed, impugned order of the High Court was set-aside and the orders of the Tribunal were restored.

Whether the Controller of Insurance had pursuant to the proviso to section 40-C(1) of the Insurance Act, 1938 condoned the excess amount said to have been spent on the expenses of management by the respondent (insurance company) in the present case

Held, that once the respondent had admitted that the prescribed maximum limit of expenses had been exceeded it was incumbent upon it to show that the excess in the expenses of management had been condoned by the Controller of Insurance, and to what extent

However, documents in this regard which the respondent should have possessed were not produced, despite the noting of the stated discrepancy by the Tribunal

If, for whatever reason, the requisite documents were not produced before the Tribunal the same should have been produced before the High Court, but this too was also not done, nor were the same produced before the Supreme Court

Burden to establish that the Controller of Insurance had condoned the excess management expenses lay upon the respondent but the respondent had failed to produce any document to establish this fact

Appeals were allowed, impugned order of the High Court was set-aside and the orders of the Tribunal were restored.

Record reflected that the company was communicated that in terms of S. 11 of the Insurance Ordinance, 2000, an insurance company shall at all times ensure compliance with the provisions of the Ordinance relating to minimum paid up share capital, statutory deposit, solvency requirements, obtaining reinsurance arrangements and such other provisions of the Ordinance as were applicable to it but the company failed to meet the minimum paid capital requirement

Company also failed to submit reinsurance treaty arrangements for certain years in violation of S. 41 & S. 11 of Insurance Ordinance, 2000

Company also failed to submit the annual audited accounts/returns and quarterly returns since the year 2001

Record also showed that the company failed to hold annual general meetings; it suspended its business; it failed to appoint its auditor; it failed to reply to show cause notices and failed to attend hearing

Financial situation of the company was bleak as reflected from its financial statement

Company had been delisted from the Stock Exchange since the year 2012

Chances of survival of the company, in such situation, were remote

Continuance of the operations of the company would be prejudicial to the interest of policyholders

Companies Judge appointed Official Assignee as Official Liquidator and directed that the company should be wound-up and that the company shall submit the statement of affairs to the Official Liquidator in accordance with law.

Company made purchase and sale transaction more than ten percent shareholder of "issuer company", within period of less than six months

Company, on account of said transaction, made gain of Rs.64,894,928 as computed in the manner prescribed in R.16 of the Companies (General Provisions and Forms) Rules, 1985

Company tendered Rs.54,013,826 in favour of the 'issuer company'; whilst, accrual of balance amount of gain Rs.10,881,102 was neither reported by the company, nor its tendering or recovery was intimated to the Commission as provided by S.224(2) of the Companies Ordinance, 1984

Company was intimated that the amount of said balance had vested in favour of the Commission

Validity

Gain would remain under all circumstances property of the company; and would not in any manner vest with the Commission

Demand raised through show-cause notice, had become infructuous

Amount of tenderable gain, was calculated pursuant to the manner provided in R.16(2) of Companies (General Provisions and Forms) Rules, 1985, which had been declared inconsistent with the statute by the Appellate Bench of the Commission in its earlier order

Impugned order was set aside.